Legislature passes budgets, ends extended session

JUNEAU (AP) — Alaska lawmakers ended the extended legislative session early Sunday after passing state spending plans and a flurry of other bills in the waning hours.

Despite running long, the session lacked the drama of the past several years, which were marked by drawn-out special sessions and bitter fights over the budget and taxes.

House Speaker Bryce Edgmon said legislators in both chambers decided they would have to trust one another, work together and compromise "in order for us to get out of here in an orderly manner."

The Senate has a Republican-led majority. The House majority coalition is composed largely of Democrats.

The end of session merited a "fist pump in the air for everybody," Edgmon said.

Saturday started slowly, with lawmakers meeting behind closed doors and trying to reach final agreement on what would be needed to finish up. Floor sessions scheduled for the morning started hours late.

Heading into the day, the major unresolved pieces were the operating and capital budgets. A tentative agreement had been reached on the operating budget earlier in the week but needed House and Senate approval. The capital budget was being worked on in the House Finance Committee.

When Edgmon announced on the House floor Saturday that it would be last day of work, it drew a smattering of hands pounding on desks — the legislative equivalent of applause.

The operating budget that was ultimately approved Saturday would be paid, in part, using Alaska Permanent Fund earnings, an outcome lawmakers were essentially forced into after years of drawing down on savings to fill a budget deficit that has persisted amid slumping oil revenues.

The measure calls for a withdrawal of $1.7 billion from Permanent Fund earnings to help pay state government costs and another $1 billion for the yearly dividend checks residents receive from the oil-wealth fund.

Lawmakers chose to cap dividend checks at $1,600 for this year, a level Gov. Bill Walker has said he supports. The dividend calculation in state law already had been ignored the past two years amid gridlock over how best to fill the deficit.

Legislative leaders have said there was insufficient support this year to pay out a full dividend under that calculation, which would have been about $2,650.

The permanent fund is a nest egg, seeded with oil money, which has grown through investments. The fund's principal is protected, but fund earnings can be spent. Use of earnings in the past, however, has been limited to things like paying out dividends.

Lawmakers also agreed to use money from the constitutional budget reserve, a state savings account, to help fill the deficit.

Senate discussion on the budget included hopefulness about a recent rise in oil prices and the positive impact that could have on the budget. North Slope oil was about $77 a barrel on Thursday. It was around $50 a barrel at this time the past two years.

On the House side, Republican critics of the budget said the package was too large and unsustainable.

The operating budget included $10 million above what Walker proposed for the University of Alaska. It included funding for additional prosecutors and law enforcement positions and for 20 positions to address a backlog in public assistance applications.

The capital budget, which emerged from House Finance late Saturday, isn't solely an infrastructure package. It also includes health and safety projects and school funding — an additional $20 million for public schools for the fiscal year starting July 1, and $6 million over two years for pre-kindergarten programs.

The package also includes another $28 million for Medicaid, though Walker's budget director Pat Pitney said that falls short of what is needed and could lead to delays in provider payments.

The capital budget also puts money toward two projects Walker had previously halted: a bridge over Knik Arm to provide another way of connecting Anchorage to the state's fastest-growing area and a project to help connect Juneau to the road system.

The budget bills now go to Walker for review.

Lawmakers also passed a flurry of other bills, including a statewide smoke-free workplace bill that had languished for months in the House despite widespread support.

Legislation passed, too, setting up a raffle to benefit schools, which Alaskans could enter using all or a portion of their Permanent Fund dividend checks. Seventy-five percent of entry dollars would go toward public schools and a new education endowment. The remaining 25 percent would go toward a prize fund.

On Friday the Legislature passed a measure aimed at paying off the state's oil tax credit obligations through bonding.

Legislators also approved a package aimed at addressing crime concerns.

The bonding bill passed despite constitutional concerns. Attorney General Jahna Lindemuth has said there isn't a constitutional problem.

Walker told reporters he had no plans to call a special session, which he said was a testament to the work lawmakers accomplished.

Senate Majority Leader Peter Micciche said lawmakers wanted to complete their work and get back to their districts. He said he wasn't happy with the outcome but said compromise was needed — and demanded by Alaskans tired of gridlock.

Lawmakers worked past the 90-day, voter approved-session limit in mid-April. They finished within the constitutional time limit; the constitution permits sessions of up to 121 days, a limit that would have been reached Wednesday.